A Tight Labor Market and Rising Pay in 2019

So as just about any employer knows, there is a tight labor market due to increased economic activity in the US. After several years of a good, but not stellar job market, and stagnant wage growth, the market is poised for rising wages in 2019, should the current economy continue this bull run. What does that mean for you as an employer? How can you make sure your company does not find itself short on good labor?

Continued Business Growth?

Business leaders are anticipating continued economic growth this year and there is no apparent answer to the labor shortage. The natural process of supply and demand will eventually cause wage pressure. Add to this the rapidly rising minimum wage and you have yourself a problem that will eventually land on your doorstep. Already, 2018 was 3.5% wage growth vs 2.5% in 2017. That’s the beginning of the trend.

Small Business Challenges

As a small business, you are far more susceptible to turnover because of a tightening labor market and rising wages. Big business has the advantage here, not only in the analytical ability to spot trends and create strategies to deal with them effectively, they also have deeper pockets to simply raise wages to attract the people they need. Hence Amazon and other mega corporations raising their minimum wage to $15.00.

How Will You Handle it?

So how do you counter this coming trend in your small business?

1. Understand and acknowledge that this coming problem exists.
2. Create a performance bonus plan or some other way to increase pay so that is tied to company profit.
3. Develop a plan to ensure your current workforce is stable and secure, using whatever combination of benefits, perks, flexibility and wage increases you can create.
4. Know where your company is going and if necessary, train people from the inside as opposed to buying talent.
5. You may have to develop your own workforce, create ongoing training and opportunities for your existing staff.
6. Make your workplace a better place to work. Many employees don’t want to work for big companies, you can compete by creating a great environment.

Increased economic activity has its advantages for sure, but with a tight labor market, especially for skilled people, it’s going to be tough to take your company as far as it can go. Anticipate the trends today and take the necessary steps you’ll need to succeed.

If can provide any ideas or help you implement a strategy, don’t hesitate to contact the experts at Infinium HR at info@infiniumhr.com.